The People’s Republic of China (later China) is a booming pet food market; and is likely to remain so for years to come. That is good news for those who export pet food to China.
The strategy of the Chinese government is to lessen the dependency on imports. And also to lessen the dependency on exports. In other words a stronger national focus with the objective that 80% of GDP is originating from and spent in China.
This means that longer-term the attractiveness of China as an export-market for pet food will fade away. Of course exports (imports for China) will continue to play a role. But probably with more restrictions than today. China is likely to take some defensive measures because it has an industry to protect. And will this industry restrict its sales to only the Chinese market? For the time being yes, but once growth-opportunity on the home-market diminishes, exports become an instinctive reaction. After all, trading is part of the DNA of the country.
These exports are likely to go to the surrounding countries; that do not have a strong national pet food industry themselves. The Western companies did not help them to build one. Because the focus is on China and the rest of the region is seen as a bonus. From an export-opportunity point-of-view. This means that no solid, defendable positions have been taken, which leaves the door wide open for Chinese entrants; it’s their backyard anyway.
This being the case, it does make sense for Western manufacturers to think a bit further than the next container to be shipped to the region. If they want to continue to play a role in the region, they must establish alliances with local partners that go further than a distributor-agreement with a 3 year duration. Because mutual respect and commitment is the strongest foundation on which to create sustainable brand-value.